THE PROS AND CONS OF BETA
These are a few advantages and disadvantages of using Beta. ADVANTAGES * Beta is a useful measurement for CAPM * It is a straightforward, quantifiable measure of risk * knowing risk levels is helpful when investing and determining cost of equity DISADVANTAGES * Beta looks backwards, which makes it less useful for predicting future stock movements * Beta does not incorporate or account for new information * For long-term investors, beta is not as useful, since it can change greatly over time. In the meantime, beta is a useful tool for determining short-term risk and for calculating quantifiable measures of volatility to aid in finding equity costs. Though, it has its pros and cons like any other investing tools,but can be a great way to establish the stability and the volatility in ones portfolio. Investdata Academy